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A day after having a receiver appointed by a court to oversee the beleaguered Scranton Parking Authority, board members defended the agency at a meeting Wednesday.

In recent months as a dispute between SPA and city council unfolded and included council plunging SPA into default by refusing to cover a $1 million SPA debt payment that was due on June 1, council majority members have repeatedly characterized the SPA as "mismanaged."

SPA board member Frank Tunis Jr. said during Wednesday's meeting, "I think everybody sitting here feels pretty comfortable that - I could probably speak for everybody - that this parking authority has not been mismanaged."

Rather, the authority has cut expenditures to the bone and increased revenues as best it could, but the gains have not been enough to meet rising debt payments - thus requiring the city, which guaranteed SPA debt, to cover bond payments, Mr. Tunis said. Council eventually relented and covered the $1 million June bond payment after the default had occurred.

Now, SPA will need the city to cover most of a $930,000 bond payment that is due on Sept. 15, and beyond that will need roughly $2 million from city coffers annually to cover debt payments for years to come, SPA solicitor Joseph O'Brien said.

Council, which has balked at having to cover SPA debt, had called for appointment of a receiver to take over SPA, install new management and sell parking garages to reduce SPA debt and the city's exposure to backing it.

SPA bond trustee Wells Fargo wanted a receiver appointed because of the June default, and the bank two weeks ago sued SPA and the city to have a receiver appointed.

On Tuesday, former Lackawanna County Commissioner Mike Washo was appointed by a judge as SPA's receiver with broad decision-making power to decide the financially struggling authority's future. That includes full control of operations and the power to operate SPA's five garages to ensure bondholders are repaid and decide which authority employees are needed to operate them. The receiver job will pay $100 an hour, to be paid from authority revenues.

Mr. Washo was not present at SPA's regular monthly meeting Wednesday because his stint has not yet officially gotten under way, according to him and SPA officials. Reached by telephone after the meeting, Mr. Washo said that he won't officially begin until he completes certain procedural formalities, such as posting a bond and sending a formal starting letter to the bond trustee - although he has begun doing some background work on SPA.

"It's premature for me to get into what it is I'll be doing," Mr. Washo said.

SPA officials expressed confidence that the agency eventually would be exonerated by Mr. Washo.

"I'm comfortable; I'm very comfortable to say that I know that when Mike Washo gets here and takes a look at our operation, he should feel very confident that this place was managed very well," Mr. Tunis said.

Mr. O'Brien added, "We have a well-managed operation, and when this is over the final reports of a receiver will reflect that. There has been no misapplication of funds; there has been no excessive spending; there has been no excessive salaries. It's a bare-bones operation. It's very easy for someone to get on a soap box and say, 'They (SPA) are mismanaged down there,' but it's another thing when the facts come out, they will disprove that."

SPA's fiscal woes stem largely from issuance of three separate bonds in the mid-2000s to build parking garages as economic development tools. At those times, SPA questioned - but ultimately relied upon - advice from its bond counsel and financial adviser to raise parking rates; however, such hikes turned out to be "counterproductive," especially in the wake of the recession that hit in 2008, Mr. Tunis said.

"Any bond issue we've done, we'd rely on both our financial advisers and our bond counsel," Mr. Tunis said. "Any time we've had anything presented to us, this board, (and) our chairwoman, Ms. (Kathleen) Stella would say at every meeting, and (SPA executive director) Mr. (Bob) Scopelliti would say at every meeting, 'Can we afford to do this?' And the answer was always 'Yes, we can afford to do this.' And we were repeatedly told on numerous occasions that in order to do that, we had to increase our monthly parking rates, which Bob has been a vocal critic of and people on this board have been a critic of, because we anticipated that if we increased our rates, it'd be counterproductive. And of course, that's what happened."

It costs $3.70 for the first hour of parking at SPA garages, and $5.10 for two hours, $7 for three hours and so on.

The monthly parking rate at SPA's five garages is $112.50.

Mr. Tunis continued, "And although we increased our revenues and decreased our expenses, revenues could not keep up with our escalating bond payment. And that's something the city obviously was aware of when we built these parking garages, which is why they had a lease agreement with us and which is why they agreed that they would make up any shortfall in the (SPA) budget."

SPA is akin to other governmental agencies, such as police departments, courts or DPWs, that generate revenues but not so much as to fully fund themselves, Mr. O'Brien said.

Councilman Pat Rogan, who has been a vocal advocate for sweeping changes at SPA, said he still hopes for management change and sales of SPA parking garages to reduce debt.

"I would hope to see the parking authority and Mr. Washo make the changes that need to be made there - the incompetent leadership that needs to be removed," Mr. Rogan said. "Before making any decisions, I would hope Mr. O'Brien and Mr. Washo, and Mr. Scopelliti if he is still employed, come before council in a (public) caucus."

Contact the writer: jlockwood@timesshamrock.com

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